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The insurance regulator is likely to contest an unprecedented appellate order seeking the ouster of one its members in a corruption case.
The decision comes following a recent order by the Securities Appellate Tribunal seeking removal of PJ Joseph, member, non-life, IRDAI, who had passed an order pertaining to the UK-based insurance brokerage, Atkins Special Risks.
The appellate body said that the order passed by Joseph amounts to ‘aiding and abetting corruption in the insurance business’ by the regulator 'that cannot be tolerated.'
A senior official associated with the development said that the regulatory body’s new chairman is likely to be appointed by the end of March, after which "we will move the highest court in April so that a decision could be out before the SC closes for summer vacations in mid-May."
Once, the Supreme Court closes for summer vacations, it will only resume on July 2.
From 2002 to 2012, Atkins had provided international re-insurance cover to Jagson International, an off-shore drilling company. Atkins has alleged, in its submission to SAT, that Jagson and its officials demanded a cut from the commission it received from 2010. Atkin says it declined. Post this, the UK company alleges, the reinsurance business was given to Marsh India Insurance Brokers.
The appellant alleged that detailed investigation by a globally reputed investigating firm showed some alleged kickbacks given by Marsh to Jagdish Gupta, Chairman of Jagson. It also filed a complaint with IRDAI (which was heard by P J Joseph), and the case was disposed of.
However, Marsh in a statement has denied any wrongdoing. It has also pointed out that SAT has not taken any view of the case.
SAT in its judgement stated that it has not expressed any opinion on the merits of the complaint filed by the appellant.
However, the appellate body asked IRDAI to pass a fresh order on a case involving alleged financial irregularities in awarding insurance broker contract to a broking firm. It also directed IRDAI to entrust the matter to a ‘competent officer other than P J Joseph, Member (non-life)’.
There have also been demands to have an insurance expert on the SAT to look into the sectors matters. Currently, it does not have any.